Editorial | VA medical site demands inquiry

Feb. 27, 2014

The current VA Medical Center on Zorn Avenue / C-J Photo

The unfortunate selection of a site off Brownsboro Road and the Watterson Expressway for a new VA Medical Center has never made any sense, given the area’s notorious traffic congestion and the prospect of a far superior location in the heart of Louisville’s downtown medical complex.

Now it’s looking outright suspicious, following new revelations about the appraisal process and the extremely high price the U.S. Department for Veterans Affairs paid for the privately owned, 36-acre, Brownsboro Road site, detailed Sunday in a Courier-Journal story by Tom O’Neill.

Records newly released by the VA raise some disturbing questions about how the value of the tract, purchased in 2004 by a private developer for $4.96 million, shot up to the $12.9 million which the VA — courtesy of taxpayers — paid for the land just eight years later.

For example:

• Why did a local company, Galloway Appraisal, value the land at $9.8 million in 2010, then turn around 14 months later and boost the value by 31 percent through a second appraisal for $12.9 million?

• Why did Galloway claim in its second, higher appraisal that it had not appraised the property in the past three years even though it had done so just 14 months before? And if the initial, 2010 appraisal was just a “draft,” as company owner Ronnie Galloway told The Courier-Journal, why does the word draft not appear anywhere in the 63-page document the newspaper obtained through open records law?

• Why did Galloway even do a second appraisal 14 months later that raised the value by 31 percent? Neither Galloway nor the VA is commenting on why the second appraisal was needed or who asked for it.

• And why can’t anyone explain the seemingly inexplicable jump in value that Jefferson County Property Valuation Administrator Tony Lindauer described as “silly?”

Nonetheless, the VA paid — apparently without question — the higher price that appears to leave taxpayers the losers. Also losing out are residents from the Brownsboro Road area who fought to block the VA Medical Center from the site, citing well-founded concerns about traffic and gridlock level congestion around the Watterson Expressway interchange.

(Page 2 of 2)

But the winner appears to be landowner Jonathan Blue, whose Blue Equity LLC bought the former tract of farmland for $4.96 million and got it rezoned for commercial and residential use before making a handsome profit off the $12.9 million sale to the VA. He’s certainly not questioning the deal, saying that would be “illogical.”

This long and tangled tale dates back more than a decade when the VA began considering a new location for its aging VA Medical Center on Zorn Avenue. The initial, preferred site was downtown, close to University of Louisville Hospital, its faculty and medical students and two other major hospitals with equipment, facilities and specialists.

Then for reasons never adequately explained, the VA shifted to seeking a suburban site.

Someone needs to untangle this tale and get answers to questions about the site selection, appraisals and sale price.

The VA Office of Inspector General, tasked with investigating management of VA programs, is in a perfect position to open an inquiry into the many questions that surround this project.

Congress should insist on it and if it meets resistance, do it itself.